Into the Metaverse
By Jeff Liguori
Social media has evolved from a niche digital trend into a global force, reshaping how people communicate, consume content, and interact with businesses. With billions of active users worldwide, platforms continue to evolve, adapting to new trends, technological advancements, and changing consumer preferences, with artificial intelligence a central force in driving that content.
Social media’s reach is staggering. As of 2024, more than 4.7 billion people globally use social media, accounting for nearly 60% of the world’s population. The sheer number of active users on platforms like Facebook, Instagram, TikTok, YouTube, and X (formerly Twitter) highlights the pervasive nature of social media in contemporary society.
These platforms are not only communication tools but also major drivers of entertainment, commerce, news distribution, and politics. For instance, Facebook, Instagram, and WhatsApp (all owned by Meta) have become critical for digital marketing, with businesses of all sizes leveraging these platforms for brand awareness, lead generation, and direct sales.
Jeff Liguori
“With billions of active users worldwide, platforms continue to evolve, adapting to new trends, technological advancements, and changing consumer preferences, with artificial intelligence a central force in driving that content.”
These outlets have provided an infrastructure for the ‘influencer’ class, who directly profit from an increasing number of visitors or subscribers to their sites. It is estimated that an influencer on Instagram with 100,000 followers earns between $1,000 and $15,000 per post, depending on content, product placement, engagement with subscribers, and ads running on their sites.
For perspective, high-profile athletes and celebrities can earn millions of dollars per post. The professional soccer player, Christiano Ronaldo, arguably the most recognized and popular athlete in the world, has 645 million followers on Instagram and more than 1 billion on all his social-media accounts combined. Taylor Swift has 280 million Instagram followers and 550 million across all platforms.
Meta Dominance
Meta Platforms, which owns Facebook, Instagram, WhatsApp, and Oculus, is undeniably one of the largest players in the social-media space. The company has expanded far beyond its original social-networking service, diversifying into virtual reality (VR), digital advertising, and even the metaverse.
As of Q3 2024, Meta reported having 3.1 billion monthly active users across its family of apps. Facebook itself remains the dominant player, with more than 2.9 billion active users, followed by Instagram with 2.4 billion, WhatsApp with 2 billion, and Messenger at around 1.3 billion users.
Despite its massive user base, Meta’s stock performance has been volatile in recent years, especially following its aggressive push into the metaverse. While its quarterly earnings reports often show healthy revenues — primarily driven by advertising — investors have been divided on the long-term potential of Meta’s shift toward virtual reality and the metaverse. The company’s stock price has been subject to dramatic swings, particularly when its investments in the metaverse didn’t immediately translate to a clear revenue stream.
For instance, Meta’s stock price saw a significant drop in late 2022, losing nearly half of its value in just a few months. This was in part due to concerns that its focus on the metaverse was draining resources that could have been used to improve its core social-media business. But investors have gained confidence in CEO Mark Zuckerberg’s vision as advertising revenue has continued to grow, and its foray into AI-powered tools has generated excitement among investors. Since January of 2023, the stock price has skyrocketed nearly 400% to the end of November 2024.
Meta is now the fifth-largest publicly traded company in the world, with 72,000 employees and a total valuation of roughly $1.6 trillion. By contrast, Walmart, the largest global retailer, employing more than 2 million people worldwide, is valued at less than half of Meta currently.
The strategic shifts, user growth in key markets, and a focus on optimizing ad revenue continue to propel Meta’s profits. The company’s Q3 2024 earnings revealed a 20% year-over-year increase in revenue, with much of this growth coming from ad sales on platforms like Facebook and Instagram.
While Meta is undeniably one of the largest players in the social-media space, it faces intense competition from several other platforms. To get a better sense of the broader social-media landscape, the most recognized key performance metric is monthly average users (MAUs), which measures how many unique users interact with a product or service within a 30-day period.
The dominance of a few platforms, with Facebook, YouTube, and WhatsApp leading the pack in terms of monthly active users, is clear. Facebook remains the largest social-media platform with nearly 2.9 billion MAUs, a testament to its broad global reach. WhatsApp and Instagram, both under the Meta umbrella, have similarly vast user bases, collectively reaching more than 4.9 billion people each month.
Despite its impressive user count, TikTok has emerged as one of the most formidable competitors, with 1.7 billion MAUs. TikTok’s rapid growth, driven by its addictive short-form video content, has captured the attention of younger audiences and advertisers alike. The app has become a significant disruptor in the digital advertising space, particularly in reaching Gen Z, a demographic that Meta has struggled to retain.
The Future … Not Without Controversy
The future of social media is uncertain, with new platforms emerging and user habits shifting. While Meta’s advertising business remains robust, its long-term stock performance will depend on how well it can balance innovation in areas like the metaverse and AI, while maintaining its massive user base across Facebook, Instagram, and WhatsApp.
And the social ecosystem is not without controversy. Social media can contribute to mental-health issues, such as anxiety and depression, due to constant comparison and online validation. The spread of misinformation is another significant challenge, as false narratives can quickly gain traction and influence public opinion. Additionally, the pressure to maintain a curated, idealized online persona can lead to feelings of isolation and a lack of authentic connection.
Expect greater scrutiny of all things digital, especially as AI becomes exponentially more powerful, driving these sites and adapting to changing user habits.
Afterword
This article was almost entirely written using the AI platform ChatGPT. While I’m not an active user of AI tools for research or writing, I think it is an important commentary on the state of technology today.
I come from a family of writers — my brother is an editor for the New York Times and a vocal opponent of using AI for such articles. And while I agree there are many pitfalls to the artificial-intelligence phenomenon, as a society, we must work diligently to use all these tools for the betterment of humanity. With the ease of content production today, it is incumbent on all of us to use AI and social media responsibly and help police those that do not.
Jeff Liguori is the co-founder and chief Investment officer of Napatree Capital, an investment boutique with offices in Longmeadow as well as Providence and Westerly, R.I.; (401) 437-4730.
